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General election 2019: Leaders woo business with tax and apprenticeship vows General election 2019: PM puts corporation cuts on hold to help fund NHS
(about 3 hours later)
Boris Johnson, Jeremy Corbyn and Jo Swinson will all attempt to woo the UK's business leaders with speeches to the CBI's annual conference later. Planned cuts to corporation tax next April are to be put on hold, Boris Johnson has told business leaders, with the money being spent on the NHS.
Mr Johnson will vow to end Brexit "uncertainty" and unveil Tory plans to cut business rates if he is returned to power in next month's general election. The rate paid by firms on their profits was due to fall from 19% to 17%.
Mr Corbyn will set out Labour's plans for 320,000 apprenticeships in England. But the PM told the CBI conference the move could cost the Treasury £6bn and the cash would be better spent on the "nation's priority".
And Ms Swinson will say the Lib Dems are the "natural party of business" because they want to cancel Brexit. Labour had opposed the tax cut and said the rate should rise to 26%, where it was in 2011.
Mr Johnson is hoping to win a majority on 12 December, get his Brexit deal taking the UK out of the EU into law by 31 January, and begin talks with Brussels on a permanent trading relationship. Leader Jeremy Corbyn is now addressing senior business figures, as he makes his own election pitch to employers and entrepreneurs.
The Conservative leader is expected to tell the CBI's conference: "Big business didn't want Brexit. You made that clear in 2016 and this body said it louder than any other. And Liberal Democrat leader Jo Swinson will say hers is the "natural party of business" because it wants to cancel Brexit.
In his remarks, Mr Johnson said business helped fund the nation's number one priority by "creating the wealth that actually pays for the NHS".
He said his party "believe emphatically in fiscal prudence" and had decided against going ahead with a further cut in corporation tax, a step first proposed by Chancellor George Osborne in 2016 to boost business in the wake of the Brexit referendum.
But many economists said the move would be unnecessary and potentially counter-productive, with a study based on HMRC data last year suggesting it could cost the exchequer £6bn a year in lost revenues.
Announcing his decision on Monday, Mr Johnson said the UK already had the lowest rate of corporation tax of "any major economy", the Conservatives having reduced it from 28% since 2010.
"Before you storm the stage, let me remind you that this saves £6bn that we can put into the priorities of the British people including the NHS," he told business leaders.
He insisted it was the "fiscally responsible" thing to do and did not mean the Conservatives were "averse to reducing taxes on business".
The Conservatives are committed to giving the NHS an extra £20bn a year for its day-to-day operations by 2023 as well as an extra £1.8bn in capital expenditure for new buildings and IT.
Labour has said raising corporation tax to 26% will raise billions to be spent on its priorities, including extra spending on health and education.
Mr Johnson is hoping to win a parliamentary majority on 12 December, get his Brexit deal taking the UK out of the EU into law by 31 January, and begin talks with Brussels on a permanent trading relationship.
The Conservative leader told the CBI conference: "Big business didn't want Brexit. You made that clear in 2016 and this body said it louder than any other.
"But what is also clear is that what you want now - and have wanted for some time - is certainty.""But what is also clear is that what you want now - and have wanted for some time - is certainty."
Mr Johnson will announce policies to help businesses "make the most of Brexit", including a review of business rates in England, with the aim of reducing the overall burden of the tax. Mr Johnson also announced policies to help businesses "make the most of Brexit", including a review of business rates in England, with the aim of reducing the overall burden of the tax.
The Conservatives also say they plan a cut in National Insurance contributions for employers, who already benefit from a reduction known as the employment allowance.The Conservatives also say they plan a cut in National Insurance contributions for employers, who already benefit from a reduction known as the employment allowance.
They would increase this from £3,000 to £4,000. They would increase this from £3,000 to £4,000. They say this would amount to a tax cut of up to £1,000 for more than half a million businesses.
They say this would amount to a tax cut of up to £1,000 for more than half a million businesses.
They would also increase the Research and Development tax credit rate from 12% to 13%, which the party says will boost manufacturing and the professional, scientific and technical services sectors.They would also increase the Research and Development tax credit rate from 12% to 13%, which the party says will boost manufacturing and the professional, scientific and technical services sectors.
The party also proposes tax relief for landlords and builders, and higher tax credits for companies that are involved in research.The party also proposes tax relief for landlords and builders, and higher tax credits for companies that are involved in research.
"With a Conservative majority government you can be sure we will get Brexit done and leave with the new deal that is already agreed - ending the uncertainty and confusion that has paralysed our economy," Mr Johnson is expected to say. "With a Conservative majority government you can be sure we will get Brexit done and leave with the new deal that is already agreed - ending the uncertainty and confusion that has paralysed our economy," Mr Johnson said.
Business rates are a tax based on rental values of the property that businesses occupy.Business rates are a tax based on rental values of the property that businesses occupy.
They are typically 50.4% of the market rent - but there are lots of complex reductions, while smaller businesses pay a bit less.They are typically 50.4% of the market rent - but there are lots of complex reductions, while smaller businesses pay a bit less.
Business lobby groups - especially small businesses - often complain about the complex system, and that rates have gone up faster than inflation since the current regime was introduced in 1990.Business lobby groups - especially small businesses - often complain about the complex system, and that rates have gone up faster than inflation since the current regime was introduced in 1990.
A recent Parliamentary inquiry found the UK had the highest level of this kind of tax in the OECD group of wealthy nations, more than double the average.A recent Parliamentary inquiry found the UK had the highest level of this kind of tax in the OECD group of wealthy nations, more than double the average.
However, it is one of the biggest sources of government revenue, raising £31bn in England in the last financial year.However, it is one of the biggest sources of government revenue, raising £31bn in England in the last financial year.
If the next government were to cut rates back to 1990 levels, it would cost about £10bn, says Jerry Schurder, head of business rates at property consultants Gerald Eve.If the next government were to cut rates back to 1990 levels, it would cost about £10bn, says Jerry Schurder, head of business rates at property consultants Gerald Eve.
Retailers complain that business rates are a factor in the closure of small shops.Retailers complain that business rates are a factor in the closure of small shops.
But economists at the Institute for Fiscal Studies have argued that cutting business rates would only give retailers short-term respite, as landlords would then increase rents.But economists at the Institute for Fiscal Studies have argued that cutting business rates would only give retailers short-term respite, as landlords would then increase rents.
'Central motor''Central motor'
Labour wants to tear up Mr Johnson's Brexit agreement and negotiate a new deal with Brussels, including a customs union and a closer relationship with the EU single market, which it would then put to a public vote.Labour wants to tear up Mr Johnson's Brexit agreement and negotiate a new deal with Brussels, including a customs union and a closer relationship with the EU single market, which it would then put to a public vote.
Jeremy Corbyn will set out Labour plans to train 80,000 people a year, as part of a "climate apprenticeship" programme, in his speech to the CBI, which is the UK's largest business lobby group.Jeremy Corbyn will set out Labour plans to train 80,000 people a year, as part of a "climate apprenticeship" programme, in his speech to the CBI, which is the UK's largest business lobby group.
"Labour's Green Industrial Revolution will be a central motor of the party's plans to transform our country and economy, using public investment to create good, clean jobs, tackle the climate emergency and rebuild held back towns, cities and communities," he is expected to say."Labour's Green Industrial Revolution will be a central motor of the party's plans to transform our country and economy, using public investment to create good, clean jobs, tackle the climate emergency and rebuild held back towns, cities and communities," he is expected to say.
Labour's plan would see 320,000 apprentices trained in jobs such as construction, manufacturing and design within renewable energy, transport, sustainable agriculture and forestry, all during its first term in office.Labour's plan would see 320,000 apprentices trained in jobs such as construction, manufacturing and design within renewable energy, transport, sustainable agriculture and forestry, all during its first term in office.
It will be funded by diverting 25% of the funds that employers already set aside through the Apprenticeship Levy and topped up by any dividends over the cap paid into Labour's Inclusive Ownership Funds - the party's plan to give workers a 10% stake in their employers.It will be funded by diverting 25% of the funds that employers already set aside through the Apprenticeship Levy and topped up by any dividends over the cap paid into Labour's Inclusive Ownership Funds - the party's plan to give workers a 10% stake in their employers.
The party said it also wanted to give employers more choice over how they spend Apprenticeship Levy Funds.The party said it also wanted to give employers more choice over how they spend Apprenticeship Levy Funds.
Shadow international trade secretary Barry Gardiner told the BBC's Today programme that stopping climate change was "a huge opportunity to create jobs and wealth".
But he added that Labour was committed to "a net zero economy well before 2050", in an apparent weakening of the party's conference pledge to achieve zero carbon emissions by 2030.
Lib Dem leader Jo Swinson will tell business leaders that her party is the "natural party of business" as part of her case for the UK staying in the EU.Lib Dem leader Jo Swinson will tell business leaders that her party is the "natural party of business" as part of her case for the UK staying in the EU.
She will attack the other two parties' plans to spend on big infrastructure projects, according to remarks circulated before the conference.She will attack the other two parties' plans to spend on big infrastructure projects, according to remarks circulated before the conference.
"Both the Conservatives and Labour will have to scramble around for projects to pour money into just to keep their word - regardless of whether they're good projects and good use of public funds," she will say."Both the Conservatives and Labour will have to scramble around for projects to pour money into just to keep their word - regardless of whether they're good projects and good use of public funds," she will say.
'Political paralysis''Political paralysis'
The CBI said it wanted business rates - a tax on business premises collected by councils - to be reformed, as part of a number of recommendations it would like the parties to adopt.The CBI said it wanted business rates - a tax on business premises collected by councils - to be reformed, as part of a number of recommendations it would like the parties to adopt.
It also asked for the Apprenticeship Levy to be overhauled. The tax has been unpopular with businesses since it was introduced in 2017. It also wants stalled programmes such as the HS2 high-speed rail link between London and the north of England, and Heathrow's third runway to be finished.
The CBI also said it wanted stalled programmes such as the HS2 high-speed rail link between London and the north of England, and Heathrow's third runway to be finished. Its director Carolyn Fairbairn told the BBC's Today programme that big business had been left feeling ignored by politicians in recent times.
"We simply cannot afford another wasted year of political paralysis, indecision and distraction while productivity and investment suffer," director general Carolyn Fairbairn is expected to say at the conference.
She told the BBC's Today programme that big business had been left feeling ignored by politicians in recent times.
"There have been so many other issues around, in terms of sovereignty and issues that aren't really business issues, which is why I think today is really important as we'll have 1,500 businesses from around the country being addressed by all three political leaders," she said."There have been so many other issues around, in terms of sovereignty and issues that aren't really business issues, which is why I think today is really important as we'll have 1,500 businesses from around the country being addressed by all three political leaders," she said.
"That says something important. It's a moment for us to hear a lot more about business in this election.""That says something important. It's a moment for us to hear a lot more about business in this election."
Business groups gave mixed reviews to the parties' plans.
On the Conservatives' proposals, Tej Parikh, chief economist at the Institute of Directors, one of the UK's oldest business lobby groups, said tax breaks to spur growth were "a sensible move".
"However, though a thorough review into business rates would be welcome, further reliefs are also needed for the here and now."
Reacting to Labour's proposals, Mr Parikh said businesses wanted to tackle climate change, "but will be concerned at the prospect of further strictures being placed on the Apprenticeship Levy, which has already gummed up the UK's skills system.
"That said, the fact that Labour has combined its proposal with the promise of wider reform suggests it is aware of the challenges and willing to work with businesses to iron out the creases."